How can I disclaim an inheritance in Japan?

Japanese business start-up consultant

In Japan, there is a three-month period of time (called a deliberation period) during which the legal heir may accept or disclaim the inheritance (The Japanese civil code, Article 915). The deliberation period starts from the time when the legal heir recognises the deceased person’s death and that they are their legal heir. It does not automatically start from the date of the deceased person’s death. This period can be extended by the family court on the application of the legal heir, an interested party or a public prosecutor.

An inheritance windfall isn’t always welcome, and it is often the case that all you get is a debt after all. The Japanese civil code (Article 882) applies what is called “The doctrine of universal succession”, that the heir(s) succeed to all the rights and liabilities relating to the property a deceased person at the time of death. The heir(s) inherit the deceased person’s entire estate and debts, including any tax arrears, as well as assets. In the case where the debts of an estate exceeds its assets, it is better to consider disclaiming any inheritance. When the heir disclaims their inheritance, they are no longer obliged to pay the deceased person’s tax arrears.

Application for a disclaimer of inheritance is made to the family court in Japan. When the process at the family court is completed, the legal heir is no longer the deceased person’s heir and does not owe any debts. However, they will not be able to inherit any right, such as real property or financial assets. After the completion of the process, the family court will issue a “Certificate of Acceptance of the Application for Renunciation of Inheritance,” and in practice, a copy of the certificate is sent to creditors, such as a bank and a credit company.

It’s important to note that if you discover that the deceased person has money in the bank and you withdraw it and spend it, you might not be able to disclaim the inheritance afterwards as this could allow you to evade repaying this debt. However, if you use the money for the deceased person’s funeral expenses of or any other reasonable necessity in a common sense amount, you can still disclaim the inheritance at a later date. It is generally recommended that you keep as little money as possible and avoid using it.

The effect of an inheritance disclaimer is that the person who disclaims the inheritance shall be deemed not to have been an heir to it from the date of succession. If the sole or all statutory heirs of the first rank, the spouse or children of the deceased, disclaim their inheritance, then, the deceased is legally treated as if they had neither spouse nor children, and under Japanese civil code, the parents of the deceased, in turn, become the heirs. The parents, of course, don’t want to owe the debt, so they also go through the process of disclaimer of inheritance. Then there will be no parents, so under Japanese civil code, the siblings of the deceased person will be the heirs. The siblings don’t want to owe the debt, of course, so they also go through the process of disclaiming it.

 

In other cases, where (for example) the statutory heirs do not a wish not to break up a family business, and agree that the eldest son should be the only heir, the other statutory heirs would each make a disclaimer.

The issues mentioned above might make you worry if everyone needs to disclaim their inheritance within three months of knowing of the deceased person’s death, but don’t worry. For parents, the three months period of the disinherit counts after the child or children’s disclaimer is made. Likewise, the three months period for siblings only starts after the parent’s disclaimer is completed and they know that the parent has disclaimed their inheritance.

I provide support for the disclaimer process to the Japanese family court from abroad.

I will update every Monday.
For more information

https://lawhelp4u.com/propertyJapan/

 

Japanese business consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

 

Choices about how to succeed

Japanese business start-up consultant

It was after my grandfather’s death that I first became aware of the “inheritance process”. I was already married at the time, and I had never cared about the “law” itself until then. At that time, when my family got into trouble with the division of the estate, I realised that “The law was something that costs money and time, and if I hadn’t prepared for it beforehand, the situation wouldn’t proceed as I want”. That’s why I started studying for the Shihoshoshi lawyer’s exam. Now I am working as a lawyer.

 

In the past, it was the standard practice for the eldest son to inherit the family’s estate, but today, each heir has the right for a certain portion of the estate. I would like each individual to come to understand the options for the estate succession, and they can make their own choices about how to succeed.

 

Specifically, the following options could be possible.

  1. Leave it to the potential heirs after death. (This is the current mainstream.)
  2. Make a gift in advance.
  3. Leave a will.
  4. Coming to an agreement into effect before death or by a will.
  5. Using the adult guardianship system.

 

Every procedure has its pros and cons, and as long as we are alive, we have different individual feelings. It would be impossible for others to understand a person’s heart 100%, but I believe it is important for a lawyer to make an effort to understand individuals’ feelings, feel empathy to their thoughts, and achieve their plan within the framework of the law.

 

Rather than us not caring about our inheritance problems, we might be so busy in our daily lives that we don’t have time to think about the death of a parent, grandparent or our own death. However, it will definitely happen at some point in the future.

 

The judicial statistics for 2018 shows that about 76% of the cases that are brought to family courts nationwide are ones of estates under 50 million YEN (equivalent to about 360,000 UK pounds). Any conflict regarding distributing an estate is not uncommon, and all of us might encounter it.

I try to be proactive about inheritance-related procedures and succession planning as my motivation for becoming a lawyer is related to my family’s inheritance issues.

 

As part of the process, I often talk to a client about how to start their succession planning. I believe that succession planning is a “letter to the family or people who will be heirs or beneficiaries”. My advice is to encourage my clients to write it like a letter first if they don’t know how to distribute their property,

 

Documents should be finalised under the appropriate law because a succession planning is a legal process, but perfect documents cannot be prepared from the beginning, and the writing from your heart is most important. After that, leave the process to the experts. I want to follow the person’s heart as best I can.

 

I will update every Monday.
For more information

https://lawhelp4u.com/propertyJapan/
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Family, Inheritance and legally secured portion

Japanese business start-up consultant

The following contents on this subject of legally secured portions are written in accordance with Japanese civil law.
I will write an outline of the “legally secured portion” in relation to the international law another time.

In my work as a Shihoshoshi Lawyer, I often have opportunities to talk with heirs and relatives about the inheritance procedure for the deceased person’s real property. Because of these experiences, I often think about my life and death through a number of legal proceedings. I don’t think I need to think about this too seriously, but as long as I am a human being, I will die one day, and when I do die, I hope that I avoid conflicts between my heirs as much as possible.

In my opinion, Shihoshoshi Lawyers, who are primarily working on non-conflicting cases and legal administrative matters, have a different perspective from Bengoshi lawyers, who are working on any cases including negotiating legal disputes.

In Japan, when a person makes a will or gifts real property to someone before their death, or divides their estate among the heirs after the inheritance occurs, there is often a problem about the “legally secured portion”.

The “legally secured portion” in Japan acknowledges the right of heirs other than the siblings of a deceased person to get a certain percentage of the estate, if the deceased person’s parent is the only heir, the fixed percentage is one-third of the entire estate. If a child is included among the heirs, he or she will be allowed a legally secured portion, even if the child is an adult. When a spouse or a child (or both) are included as an heir, the legally secured portions is one-half of the entire estate. The individual heir multiplies this entire estate by their individual legal percentage.

It is easy to say “a certain percentage” in words, but it’s hard to know what the extent their estate is at the time of death. Even if the heirs clarify what is the whole estate, if a conflict arises because one of the heirs keeps an excessive proportion of the estate, and they refuse to negotiate, the heir who thinks they have not received what is their right should take action in a court. However, it is not always possible for such an heir to be granted their full entitlement in accordance with their wishes.

In today’s nuclear families, it is common for different generations not to live together when children legally become adults at 20 (at 18 from 1st April, 2022), and there might not be many opportunities for them to see each other if they live separately. However, inheritances will always occur at some point. I think the best way to avoid a conflict is actually to find as many opportunities as possible to keep in close contact, see each other once in a while, and keep the relationship between parents and children alive. I believe that with rights always come obligations. I don’t think looking after parents is an obligation, but I do believe that this responsibility as a child exists to some extent.

Please refer to the article about “Estate and Succession planning – 1-7. Making a will Part 1 & Part 2”

https://akikohorishihoshosilawyer.wordpress.com/2020/06/01/estate-and-succession-planning-1-7-making-a-will-part-1/

I will update every Monday.
For more information

https://lawhelp4u.com/propertyJapan/

Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Estate and Succession planning – 1-7. Making a will Part 2

Japanese business start-up consultant

3. Jurisdiction and applicable law in Succession

 

In Japan, the article 37 of the Act on General Rules for Application of Laws is applied for wills and succession. Article 37 states that the formation and effect of a will shall be governed by the national law of a testator at the time of the formation. Concerning this provision, ‘the formation and effect of a will’ means only matters concerning the transmission of wills, such as the mental capacity, defective evidence of intention, effect of a will or validity of a will. When the will comes into effect at the time of death, the contents of the will, including maintenance obligations arising by reason of death is determined by article 36 of the same law.

Under the Act on the Law Applicable to the Form of Wills, both the governing law of the will (article 37) and the inheritance (article 36) are stated to be the national law, but there is a time gap between the will at the time it was established and the inheritance. If the nationality of the person is different between the time of making the will and at the time of death, the governing law might be different. To avoid the confusion, as a practical matter, a testator can choose which law governs succession to their estate.
In addition, when acknowledging a child or putting an estate in the trust under a will, article 29 (Formation of Parent-Child Relationship with Child Born Out of Wedlock) or article 7 (Choice of Governing Law by the Parties) of the same law is applicable.

As well as the Act on General Rules for Application of Laws, there is the Act on the Law Applicable to the Form of Wills, which was created by ratifying the Convention of The Hague Conference on Private International Law in 1961.
Under the Act on the Law Applicable to the Form of Wills, a formally prepared will becomes valid as long as it complies with the law of the place where the will is established, of the country where the testator has nationality, of the place where the testator had domicile, of the place where the testator had habitual residence or the law of the place where the real property is located.

 

4. Advice

This selective listing of a large number of laws in the Act on the Law Applicable to the Form of Wills allows a statutory will as far as possible, and most wills made under the law of the place where the testator resides will become valid in most of cases. However, in practice, a will which follows the methods of Japanese law is prepared separately in many cases in order to carry out the post-death administrative procedures for Japanese estate smoothly.
It is possible for an individual to make a will for themselves, but that is not without its risks. There might be technical issues that potentially could go wrong. If there are any errors, these could cause problems after the death. I can advise on arrangements for a will, and highlight potential problems that might arise.

I hope the information is useful.

I will update every Monday.

For more information

Japanese business start-up consultant 

Shihoshoshi Lawyer

(Judicial Scrivener)

http://lawhelp4u.com/advice/

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 1

Japanese business start-up consultant

1. Historical Background

In Japan, since the Middle Ages, the custom was not only for the firstborn legitimate son to inherit most of his parent’s estate, which was generally the case, but also for the eldest girl or youngest son to succeed to and maintain the family business, such as farm fields or business rights.

In the modern era, when an estate was considered as the sum of a person’s assets, the inheritance process was regarded as one of the division of an estate between a small range of close relatives, such as a person’s spouse and their children or parents. Therefore, the principle is that the sum of a person’s assets is distributed equally to the heirs of a certain rank.

As in France and Germany, the Japanese laws have definite rules on who will receive most of a deceased person’s estate, whether there is a will or none, but there is the freedom of making a will.
In addition, there is a system of legally secured portions for certain legal heirs in order to harmonise the legal inheritance rules and the freedom of making a will.

 

2. Legal heirs and the inheritance process under the Japanese law

In Japan, a deceased person’s legitimate surviving spouse will always be their heir, but will only be their sole heir if there are no legal heirs in the first, second or third ranks. Legal heirs in the first rank are the children, lineal ascendants (parents, grandparents, etc.) are in the second rank, and the deceased person’s legal siblings are in the third rank. Heirs of the second rank only inherit if there are no heirs of the first rank, those of the third rank only if there are none of the first two ranks.

If there are several people in the same rank, their portion will be divided equally among all those in the same rank. There is no legal distinction between a biological child or an adopted child or by gender, and even if they become married or adopted, they will still be heirs.

If a deceased person’s child dies before them, and if the child has a child (a grandchild for the deceased person), the grandchild is entitled to inherit and will have the same rank as a living child of the deceased person. Furthermore, if the grandchild also dies before the deceased person, and if the grandchild leaves their child (a great-grandchild for the deceased person), the great-grandchild will be one of the deceased person’s heirs. If the deceased child has several children, they share what would have been their parent’s share equally, and the same principle applies to the children of a deceased grandchild.

If there is no child at all, a deceased person’s lineal ascendant (parents, grandparents, etc.) as the second rank becomes the heir. Amongst lineal ascendants, the heirs will be close relatives (parents will be heirs if there are parents and grandparents). If there are biological parents and adoptive parents, both can be heirs as the same rank.

If there is no lineal ascendant, legal siblings become the heirs as the third rank. Legal siblings mean children who have shared at least one parent in common either by blood or adoption. However, if the legal siblings have shared only one parent in common, their share in the inheritance is one half of the share of a sibling who shares both parents. In addition, in this case, if the siblings who are supposed to be the deceased person’s heirs die before the deceased person, only their child (the deceased person’s nephew and niece) can succeed the third rank of heirs, and not the nephew’s or niece’s child.

If it is not clear who is a deceased person’s heir, the family court will conduct a legal procedure. Under this procedure, an executor for the succession who is appointed by a family court, and will search for the deceased person’s heirs under the family court’s supervision, and deal with matters of succession. If no heirs can be found, the deceased person’s estate may be distributed to those who have physically lived together with the deceased person, such as de facto partner or children, or the family court may consider special circumstances respectively. If there is still any remaining estate, it will become national assets.

An estate consists of various assets such as money, land, movables and loan claims, and the methods of division amongst their heirs is called the inheritance division. If the deceased person determines the method of this division by their will or entrusts their assets to a third party, the division will be followed by the method chosen. If there is no such determination, their joint heirs will decide the method. If no agreement amongst heirs is possible, a family court will be involved. The family court carries out the inheritance division in consideration of the type and nature of the estate, rights relating to the assets and any other circumstances.

To Be Continued.

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Regulation for Shihoshoshi Lawyer

Strict confidentiality is imposed on every Shihoshoshi Lawyer to protect the contents of consultations with and request by a client.
The client is protected by many strict laws, Association Regulations and a Code of Ethics.
If a Shihoshoshi Lawyer violates those rules, severe punishments, such as the suspension of qualification are imposed.

The number of Shihoshoshi Lawyers in 2016 is about 22,000 across nation.
There is one Shihoshoshi Lawyer Association in each prefecture to supervise every Shihoshoshi Lawyer there.
A Shihoshoshi Lawyer belongs to the Shihoshoshi Lawyer Association in the prefecture where he or she has their own office.

For more information
Shihoshoshi Lawyer Akiko HORI

Legal Advice for Business in Japan

How to Buy a property in Japan

The inheritance rule in Japan

Hello. I am Akiko Hori, a Shihoshoshi lawyer in Japan.
Thank you for reading this.

Already, four months have passed since I came back from London to Japan.
Time flies so quickly!
I still miss London a lot but I am coming to terms with my current situation and getting things into perspective.

Today I would like to talk about the Japanese Inheritance procedure.
Japanese law grants an automatic right of inheritance to the surviving partner and children.
An heir should either give an unconditional or qualified acceptance of the inheritance, or renounce their right of succession within three months. If he/she needs to extend the initial three month period, they can ask the family court for an extension of the period.

In most cases it is considered rather good news to inherit the asset of a deceased person. However, if the deceased was heavily indebted, it may be a different story.

If a legal surviving partner who has children renounces their inheritance, then these children will be next in line. If there are no children, then the parents of the deceased will be next in line. Moreover, if there are no children and parents, then the decedent’s brother or sister will be third in line.

Nowadays a lot of Japanese people go abroad for their life and work and the situation is getting complicated. The fact that a child whose parents are Japanese is born in outside of Japan and speaks only English may occur often. I already have the experience of helping those people legally and linguistically.